ECON 1000 Lecture Notes - Lecture 4: Margarine, Demand Curve, Excess Supply

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: Steven Edwards

Document Summary

Questions from chapters 1-4 or to the point we finish today. One, by definition, would not shift that demand curve. One, by definition would not shift that supply curve. Equilibrium is where both the buyer and seller agree to exchange. Excess supply (surplus) and excess demand (shortage) Predictive changes in price and quantity need to be analyzed. Changes that occur in demand on its own, supply on its own, or in combination. Price rises, qs increases along the supply curve. But no change in supply (movement along the supply curve, not a shift: demand increases, price increases, qs increases, demand decreases, price decreases, qs decreases. Price falls, qd increases along the demand curve. But no change in demand (movement along the demand curve, not a shift: supply increases, price decreases, qd increases, supply decreases, price increases, qd decreases. Elasticity of demand = % change in qd/% change in price.